What must an insurer do when disclosing an insured's nonpublic information?

When disclosing an insured's nonpublic information, an insurer must give notice, explain how the information will be used, and allow the insured the option to opt out of having their information shared. This aligns with privacy regulations such as the Gramm-Leach-Bliley Act (GLBA) in the United States, which requires financial institutions, including insurance companies, to inform clients about their information-sharing practices and give them the opportunity to refuse having their information shared with third parties.

Providing a summary report may not fulfill the legal requirements for transparency and consent regarding nonpublic personal information. Contacting family members for consent is not a standard practice because it could violate privacy rights. Automatically sharing information with other parties would directly contradict the privacy protections established by law, which aim to protect the customer's personal information from being disclosed without explicit consent. Therefore, the requirement for insurers is primarily to ensure the insured is adequately informed and has control over their own information.